Notes and definitions for housing market and house prices live tables

For definition of a dwelling, type of dwelling, tenure and general definition of a household see Definition of general housing terms .

House Prices

The house price index is a weighted average of prices for a standard mix of dwellings. From 1969 to 1992 the index reflected dwellings mortgaged by building societies. From 1983 the standard mix of dwellings was updated annually to reflect the types of dwellings purchased during the previous three years.

In the early 1990s many of the larger building societies converted to banks and an index limited to building society mortgages could no longer be assumed to be representative of all house purchases. So from 1993 the index was extended to include both banks and building societies and was re-named the All Lenders index. It was based on a five per cent sample survey of all lenders. Since 2001 a number of lenders (but not all) submitted details of all their completions instead of a five per cent sample. Data from 2003, until August 2005 reflects the results of this enlarged sample.

From September 2005, the survey became 100 per cent for those lenders taking part and changed to take data from the Financial Services Authority data collection. It's name was changed to the Regulated Mortgage Survey (RMS). Data covering 1993 to 2002 are based on a sample size ranging from 26,000 to 36,000 per annum. From mid-2003 to August 2005 the survey covered about 25,000 mortgage completions per month. The RMS is larger and by the end of 2005 was covering about 40,000 mortgage completions a month. During 2006 about 50,000 mortgage completions a month were covered.

The questionnaire on which the survey is based has been revised from time to time, for example in 1982 when the question on the previous tenure of borrowers was extended to identify sitting tenants. The present method of analysis was introduced in the second quarter of 1968 and most of the detailed series now published have their origins in this period, although the mix-adjustment was modernised in 2003 when the monthly series was introduced. Only the main national series go back to the first quarter of 1966.

Note that tables generally include, among other things, purchases at a discount by sitting tenants, where such purchases were financed by mortgage.

Home Loans

Mortgage lending by type of lender

This brings together data from a wide range of sources. A breakdown in money terms is given both for gross advances and net advances. Two significant trends are clearly illustrated: firstly the increasing importance of lending by banks and the equivalent decline in lending by building societies. Though since many of the larger building societies from ten years ago have converted to banks, this is perhaps not too surprising.

The other trend is that although total gross advances in 2000 were twice the 1990 level, net advances were only slightly higher. The reason for this is the increasing amount of re-mortgaging. A re-mortgage for £100,000 will add £100,000 to the gross advance figure but will have no effect on net advances because the "plus £100,000" for the new lender will be offset by a minus figure for the previous lender.

The figures that relate to mortgages advanced for the purchase of single dwellings are those which are to be used wholly for owner occupation. This definition differs from that used in this section, and by the Office for National Statistics, eg in Table 3.2c of Financial Statistics, in that it does not include mortgages for purposes such as the purchase of dwellings for letting (buy to let), the purchase of more than one dwelling at a time or for further advances.

Additionally:

the income of borrowers is the total recorded income on which the mortgage is based - and it may understate the borrowers' true income or may include more than one income
the North West includes Merseyside - the previous index programs were written when Merseyside and the rest of the North West were separate Government Office Regions and we are unable to produce a combined index prior to 1999
new dwellings are defined as those that never previously existed. So conversions of buildings (eg out houses, barns) into living accommodation are not counted as new dwellings

Mortgage Repossessions

This includes details supplied by the Ministry of Justice (previously known as the Department for Constitutional Affairs), of county court actions for recovery of residential premises and land in terms of actions entered and orders for possession made.

Mortgage Payments

Mortgage payments results are analysed by Communities and Local Government from data collected in the Family Resources Survey (FRS), a survey commissioned by the Department for Work and Pensions. The published data are for England, as for the SEH data.

Payments include both interest and the repayment of capital, if there was any. Insurance premiums relating to endowment mortgages are included, as are similar payments for pension or PEP mortgages and the like.

Care is needed in interpreting the figures as some are based on small samples and are therefore subject to substantial sampling error. The figures are shown grossed, using the Department for Work and Pensions own grossing factors.

Further information is published by the Department for Work and Pensions in FRS annual reports. Data from the Expenditure and Food Survey (EFS) also continue to be published annually in a report entitled Family Spending. Unpublished FRS and EFS data on incomes, rents and mortgage payments can be obtained from the Communities and Local Government, Housing and Communities Analysis Division, Zone 2/A2, Eland House, London SW1E 5DU.

Interest Rates

Bank of England base rates

This tends to dominate all other levels of interest rates - both for borrowing and saving. From 1997 the base rate has been reviewed monthly by the Bank of England Monetary Policy Committee.

Public Works Loan Board

The rates shown are those applicable to short term and very long term loans. Other rates apply for intermediate terms. They are repayable at maturity and refer to the amount which an authority borrows within its annual quota. Where authorities borrow further sums these will attract interest at a higher rate, unless the Public Works Loan Board Commissioners agree that they should be offset against the following year's quota.